Are you thinking of buying a home with someone you haven’t’ married yet? While it’s not the ideal situation, it certainly is possible. Your parents may want you to wait, but legally there are ways that you can purchase a home together without it becoming a total nightmare if you end the relationship.
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Keep reading to learn the top things you should do before you buy a home as an unmarried couple.
Get a Legal Agreement
While you might be feeling head over heels in love right now, that could change. While we don’t want to dwell on the negative, it’s important to face the facts that not every couple that buys a house together stays together. What would happen if you split up? The law doesn’t cover unmarried couples in homeownership – only married couples. So you would be on your own dealing with a he said/she said type of situation if you don’t get a legal agreement.
Some people call it a ‘house prenup.’ Whatever you want to call it, the agreement puts into writing everything that you and your significant other agree on about the house. A few of the topics in can include are:
- Who is responsible for the mortgage
- Who is responsible for the utilities
- Who is responsible for the taxes and/or homeowner’s insurance
- What happens if the responsible partner can’t meet his/her financial obligations
- What happens to the home if you break up?
- What happens if one partner becomes ill or disabled?
These are just a few of the topics that you must cover.
Figure Out the Right Type of Ownership
Owning a home with someone you aren’t married to makes it more difficult to figure out how to take title. While you can own the home in joint tenancy, it’s not always the right option. You’ll have to consider:
- Sole owner – Only one person’s name goes on the title. Even if your partner brings money to the table, he/she won’t be on the title in this situation. It’s not the best idea because the person that isn’t on the title risks walking away with nothing should you end the relationship.
- Tenants in common – Both owners would go on the title with this type of ownership, but the ownership doesn’t have to be ‘equal.’ For example, one owner could own 45% of the home and the other own 55% or any other combination. This can help in the case that one person puts more money down on the home, but it makes it hard if one owner dies because there are no automatic rights with this type of ownership.
- Joint tenancy – Both owners are on the title and own 50% of the property. If one owner dies, the other owner automatically inherits the other 50% of the property.
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Each type of ownership has its pros and cons, which you should discuss with your attorney before taking title.
Keep Written Track of Your Finances
Because you aren’t married, there could be squabbles down the road about who paid for what and who gets what. Rather than dealing with the stress of arguing, write everything down and keep proof of each payment.
If you pay with checks, keep the canceled checks. If you pay with a credit/debit card, keep the statements that show the payments. If you ever break up and have to fight for money that you paid for the house, you won’t have a leg to stand on without written proof of the payments.
No matter what you decide, you should always have an attorney look over the situation before you buy the home. This way you know all of your bases are covered. Buying a home with someone you are not married to can be complicated, but it can be done with the right help!